INDIANAPOLIS — Indiana American Water has won state regulatory approval to replace customer-owned lead water lines at the same time as the company removes and replaces lead service lines throughout its Hoosier water systems over the next 10 to 24 years.
The Indiana Utility Regulatory Commission unanimously approved the water company's plan that was first in the state to take advantage of a 2017 law aimed at eliminating potentially dangerous lead pipes from water service.
Records show Indiana American Water has up to 50,748 lead service lines running from distribution mains to customer meters, of which approximately 65 percent are in Northwest Indiana, primarily Gary.
Under the plan, the company will replace 1,000 to 5,000 of those lines in each of the next five years, and up to 6,000 lines a year through 2041, while also replacing the customer-owned portion of the service line beyond the meter if it contains lead.
Company officials told the IURC that replacing the customer-owned water line at the same time as the company replaces its lead pipes will save money, minimize service disruptions and ensure no lead remains in the water system.
The company expects it will cost approximately $3,500 to replace each customer-owned water line.
If homeowners independently hired contractors to swap out their water lines they'd have to pay between $4,000 and $5,500 each, according to Indiana American Water.
The cost of the work, which ultimately could total $177 million, will be recovered through standard rate adjustments, according to the IURC.
It's not currently known how many homeowners will be affected, since some of the company's lead water lines likely no longer are in service due to neighborhood changes, such as building demolitions or replacement with new construction.
Some homeowners also may previously have upgraded their water lines on their own.
The company initially proposed not replacing lead water lines leading to properties whose service had been disconnected for at least 24 months.
But the commission rejected that proposal after Cynthia Armstrong, of the Office of the Utility Consumer Counselor, observed that such a policy could exacerbate urban blight, since it's likely no one would purchase a home or build in an area with outdated water infrastructure.
The OUCC indicated that it's also concerned there is no process to prioritize water pipe replacement by lead levels, and that homeowners will be required to indemnify the water company against excessive property damage claims.
"Obviously we recognize the importance of replacing lead service lines, and that's why we supported the plan that was proposed by Indiana American," said Anthony Swinger, OUCC director of external affairs.
"At the same time, we made several recommendations for improving the plan. We're disappointed that those recommendations were not implemented, and so we're still reviewing the order and we're still evaluating our options."
In the end, the five state utilities commissioners agreed that Indiana American's plan for simultaneous lead pipe replacement is "reasonable and in the public interest."
State Sen. Ed Charbonneau, R-Valparaiso, who last year sponsored House Enrolled Act 1519 that made it possible for water utilities to incorporate in their rates the cost of replacing customer-owned lead water lines, said he's pleased how well the process worked.
"I think it's absolutely fantastic," Charbonneau said. "They've done exactly what the Legislature intended be done when we drafted this."
"Because of it, we're going to have cleaner, safer drinking water in the state of Indiana. Lead service lines are a problem all over the country, and Indiana American has gone out and said, 'We're going to do something about it.' "
Charbonneau explained that replacing the customer-owned line is key, because even if a water utility eliminates lead from its pipes, an old customer line still could cause issues with a homeowner's drinking water.
"This is a solution to a very serious problem, and I commend the IURC for doing it, and, even more so, I commend Indiana American for taking the initiative and doing it," Charbonneau said.
"I think it's a huge step for the state, and hopefully there will be other situations like this to come in the future."
Indiana American Water’s Northwest Indiana District provides water service to Gary, Hobart, Merrillville, Chesterton, Burns Harbor, Portage, Porter, South Haven, Winfield, Shorewood Forest and White Oaks, a conservancy district in Porter County.
The company also supplies water to Schererville, Crown Point, New Chicago and Ogden Dunes through wholesale contracts. In these communities, the local water system is responsible for infrastructure upgrades.
Indiana American Water treats its water to prevent corrosion of lead pipes and plumbing equipment installed prior to the 1986 lead-plumbing ban, and records show the company is in compliance with the U.S. Environmental Protection Agency’s Lead and Copper Rule.
However, the EPA rule widely is viewed as inadequate to protect public health, and experts caution the best way to eliminate the risk of lead in drinking water is to remove aging pipes and other plumbing equipment that can leach lead.